Average home prices grew by 2.2% from April to May, according to the latest Standard & Poor’s/Case-Shiller Home Price Indices report.

The 2.2% price increase is tied to both the 10- and 20-city composite indices studied by S&P.

“The 10- and 20-city composites were each up 2.2% for the month and recorded respective annual rates of decline of 1% and 0.7%, compared to May 2011,” S&P said Tuesday. “While still negative, these annual changes are the best we’ve seen since in at least 18 months.”

The S&P Case Shiller also noted that 17 of the 20 metropolitan areas studied in its report saw increases in annual price returns when comparing the months of April and May.

The cities where prices continued to waiver included Boston, Charlotte and Detroit, with their annual price returns hitting -0.1%, a slight 0.9% and 0.6%, respectively.

Atlanta remains a bear market with the city posting a double-digit negative annual price return rate of -14.5%. Still, Case-Shiller calls that change greatly improved from the negative 17% annual decline reported in Atlanta back in April.

Phoenix, on the other hand, has gone from cold to hot with prices on the rise.

“Taking a closer look at the cities, Phoenix again posted the best annual return,” the S&P Case-Shiller said. “Average home prices in that region were up 11.5% versus May 2011. It was one of the hardest hit cities in the collapse, and prices are still more than 50% below their June 2006 peak, but the past five months have been positive for that market.”

Other formerly cold markets with positive annual return rates included Miami and Tampa.

Looking at the latest data, the S&P Case-Shiller is cautiously optimistic about home prices and the real estate market.

“June data for existing home sales, new home sales, housing starts and mortgage default rates were a bit mixed, but all are better than their year-ago levels,” the report said. “The housing market seems to be stabilizing, but we are definitely in a wait-and-see mode for the next few months.”

Capital Economics released a statement on the report, saying “the fourth successive rise in the Case-Shiller measure of seasonally-adjusted house prices means that prices are experiencing more than just their usual seasonal lift.” The research firm added, “Moreover, tight supply conditions and an underlying improvement in demand suggest that prices are not going to give up all of these gains in the second half of the year.”

Reverse mortgages will be as ubiquitous as individual retirement accounts in 10 years because many folks will have more money in the former than in the latter, says Scott Norman, vice president of Austin, Texas-based Sente Mortgage‘s reverse mortgage division.

Norman says the forces of supply & demand and education will serve as the engine for his prediction’s materialization that every extended family will have a member with a reverse mortgage.

“There’s still a great deal of education — for financial planners, certified public accountants, home health care professionals, real estate attorneys — that needs to be done,” Norman says. “We haven’t even scratched the surface yet.”

Reverse mortgages let borrowers convert a portion of their home equity into cash. However, unlike a traditional home equity loan or second mortgage, borrowers can hold off on repayment until they no longer live in the home, fail to meet the obligations of the mortgage or pass away.

The demographics point to a robust consumer base for the reverse mortgage industry.

The population of individuals 65 and up increased 15% to 40 million in 2010 from 35 million in 2000, according to the Department of Health and Human Services. It projects a 36% increase to 55 million in 2020. And by 2030, about 72.1 million older Americans, over twice their number in 2000, will exist — about 19% of the U.S. population.

Norman says Sente Mortgage views reverse mortgages as a product with unlimited upside, a natural financial planning option for aging Americans within the housing economy. He favors the Home Equity Conversion Mortgage Saver, a type of reverse mortgage offered by the Federal Housing Administration that requires drastically lower upfront fees — just .01% of the home value — than the HECM Standard, but reduces the amount of money available to the borrower.

“As the baby boomers continue to age and home values stabilize, the question is ‘How are they going to retire?’’ Norman says. “Pull up average 401(K), average savings amount, average debt. These seniors aren’t going to be able to retire at a fraction of what they’re living today. I don’t think I’m exaggerating.”

“I’m not saying a reverse mortgage is for everybody, but it is certainly an option that may be the most realistic for a majority of the seniors in the next five to ten years,” Norman says. “It’s safe, it’s cost efficient. The biggest complaint you have regarding reverse mortgages is not the product, but that it’s expensive to grow old in America.”

They’re also confusing, according to the Consumer Financial Protection Bureau, which released a report highlighting the risks for American consumers as they struggle to understand reverse mortgages.

“Reverse mortgages are complex and have the potential to become a much more pervasive product in the coming years as the baby boomer generation enters retirement,” said CFPB Director Richard Cordray.

The CFPB report found that while consumers are largely aware of reverse mortgages, few completely understand them. “Many consumers struggle to understand how their loan balance will rise and their home equity will fall over time with a reverse mortgage,” the reported stated. “Some borrowers do not understand that they need to continue to pay taxes and insurance with a reverse mortgage.”

Norman concedes that some of the bureau’s conclusions were “relatively accurate” and applauds the bureau for embarking on such a study. However, he scolds it for not consulting consumers while conducting the study and forming conclusions. The CFPB has yet to respond to inquiries about Norman’s claim.

According to the CFPB study, 70% of borrowers are taking out the full amount of proceeds as a lump sum rather than as an income stream or line of credit. “This raises concerns that consumers who take out all of their accessible home equity upfront will have fewer resources available later in life. They may not have the money to continue to pay taxes and insurance on their homes, which can put them at risk of losing their home,” the report stated.

As part of a public education campaign, the National Reverse Mortgage Lenders Association developed a newly redesign consumer website in June that provides comprehensive help and information on the entire process of obtaining a reverse mortgage. NRMLA is partnering with the federal government as part of the campaign.

Norman, meanwhile, doesn’t think the CFPB’s findings are wrong. He just doesn’t think they went far enough.

“Most of the seniors we deal with are smarter and wiser than we’ll be in the next 20 years,” Norman says. “These are smart people. They lived through World War II. We haven’t.”

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California Attorney General Kamala Harris announced Wednesday that Governor Edmund G. Brown signed two provisions of the much-debated Homeowner Bill of Rights into law.

The Homeowner Bill of Rights so far consists of a series of related bills containing provisions that prohibit certain practices by lenders that have been attributed to the state’s foreclosure crisis. Chief among the banned practices are robo-signing (signing of fraudulent mortgage documents without review) and dual-track foreclosure (starting foreclosure proceedings while the homeowner is in negotiations to save the home). The bill imposes civil penalties on perpetrators of these activities. In addition, it guarantees struggling homeowners a single point of contact at their lender who has knowledge of their loan and direct access to decision makers.

“Californians should not have to suffer the abusive tactics of those who would push foreclosure behind the back of an unsuspecting homeowner,” said Brown. “These new rules make the foreclosure process more transparent so that loan servicers cannot promise one thing while doing the exact opposite.”

The laws will go into effect at the start of 2013. Borrowers can access courts to enforce their rights under the legislation.

The Homeowner Bill of Rights also contains a number of bills currently outside of the conference committee process. These other bills enhance law enforcement responses to mortgage and foreclosure-related crime. In addition, some bills are designed to help communities fight neighborhood blight resulting from foreclosures and provide enhanced protection for tenants in foreclosed homes.

The bill, unveiled by Harris in February, builds upon reforms negotiated in the national mortgage settlement between leading lenders and 49 states. Harris secured up to $18 billion for California homeowners in the agreement, some of which was used to establish a Mortgage Fraud Strike Force intended to investigate crime and fraud associate with mortgages and foreclosures.

“The California Homeowner Bill of Rights will give struggling homeowners a fighting shot to keep their home,” said Harris. “This legislation will make the mortgage and foreclosure process more fair and transparent, which will benefit homeowners, their community, and the housing market as a whole.”

Once again, data compiled in the Obama administration’sHousing Scorecard pointed to both signs of promise and reasons for concern. The May scorecard was jointly released by the administration and Treasury Department Friday and provides an overview of the health of the housing market based on data pulled from the public and private sectors.

According to the scorecard, one positive indicator for housing was the 7.4 percent rise in home equity to $457.1 billion in the first quarter of 2012. The increase boasts the highest gain since the second quarter of 2010.
Also, the National Association of Realtors reported sales for existing homes posted a 9.6 percent yearly increase in May compared to a year ago. May’s level also marked a 2-year high.

On the downside, the impact of serious delinquencies and underwater mortgages continues to strain the housing market. After months of declines, RealtyTrac reported foreclosure starts increased monthly and yearly at 12 and 16 percent, respectively, in May. Completed foreclosures also increased 7 percent month-over-month, but were still down 18 percent from May 2011. These increases in foreclosure starts and completions in May serve as a reminder that the housing market is still in a fragile state.

With the scorecard, the administration also released the Making Home Affordable report which details progress on government foreclosure prevention actions.

Through the administration’s Making Home Affordable Program, nearly 1.2 million homeowner assistance actions have taken place, including more than 1 million HAMP mods, according to the report.

The average savings for homeowners who received a HAMPmod was about $536 on their monthly mortgage payment as of May. About 86 percent of homeowners who entered the program in the last 22 months received a permanent modification with an average trial period of 3.5 months.

About 70 percent of non-GSE borrowers who received a HAMPmod also had their principal reduced. The number of homeowners who received a HAMP Principal Reduction Alternative (PRA) totaled about 83,000, and on average, they have seen a median principal reduction of $68,267.

The Second Lien Modification Program (2MP) helped approximately 84,000 borrowers who were able to save a median of $159 per month on their second mortgage. Interestingly, over 50 percent of 2MP homeowners reside in three states – California (36 percent), Florida (9 percent) and New York (6 percent).

Nearly 51,000 homeowners avoided foreclosure through a short sale or deed-in-lieu through the Home Affordable Foreclosure Alternatives Program (HAFA).

One popular administration program is the Home Affordable Refinance Program (HARP). So far, HUD Acting Assistant Secretary Erika Poethig said almost half a million families have taken advantage of the program, and refinanced families save an average of $2,500 per year.

While the efforts have been well-received, the administration would like to see the program further enhanced to reach more underwater borrowers.

“But with so many homeowners still underwater on their mortgages and struggling to move into more sustainable loans, we have much more work ahead,” said Poethig. “That is why we are asking the Congress to approve the President’s refinancing proposal so that more homeowners can receive assistance.”